Irish company Ocuco is now the largest optical software firm outside of the
The deal, which is valued at over £3m sterling, is the biggest in the history of the European optical software industry.
Ocuco founder Leo McCanna, who had the initial idea for the business while on holiday in Galway in 1993, now oversees a company boasting a suite of products covering both optical retail and laboratory systems, pharmacy and ophthalmology; with a combined revenue of over €6m in 2005, a staff of 55 and an installed base of over 1000 sites spread across the UK, Ireland and Europe.
“This deal gives us effectively a dominant market share in the UK,” said McCanna. “We already have about 30% of the retail side of the UK optical market and on the wholesale labs side Relcon software would have maybe 80% market share. Relcon also bring to the table some very nice technology. It puts us in a very good strategic position to grow our business over the next five years.”
The deal will see the retention of Ocuco’s flagship Acuitas product – a software package which allows opticians practices to manage their customer base – as well as Relcon’s F.O.C.U.S. practice software brands.
The acquisition follows on from a recently concluded Management Buy-Out (MBO) which valued Ocuco at €5m.
“That MBO is now complete and between myself and Ocuco staff we own 98.5% of the company,” said McCanna.
Ocuco is one of the foremost success stories in the Irish retail software market. The initial impulse for the company came when McCanna and a friend had the idea for a ‘Smart Card’ which would hold a patient’s optical prescription and could be easily read in any opticians practice. McCanna, who has a degree in Electrical Engineering from DIT and an MBA from UCD, was ahead of his time.
“Back in 1993 most Irish opticians didn’t have computer systems, so it was like inventing cars before there were roads.”
However the idea evolved into the development of a software package to help opticians administer their practice more effectively. The company built slowly at first, without external funding, but made steady progress, and in 1997 McCanna secured finance to develop a package – Acuitas - that could meet the requirements of large chains, small independent practices and hospitals.
“Between 1997 and 2000 we grew our turnover from approx £100,000 to about €1.2m and during that period we raised approximately €750,000 in equity finance from investment firms, BES investors and family and friends,“ said McCanna.
The company’s development was then slowed by the external conditions pertaining in 2001 and 2002, but made its first profit of €200,000 in 2002, and has been profitable every year since.
A huge boost was the sealing of a deal with UK giant Vision Express in 2003, where Ocuco were given the contract to supply software to its network of more than 200 stores. This meant McCanna and colleagues had to ratchet up their operations considerably.
“We rolled out our software to over 200 stores Vision Express stores in 2005. There are about 3,000 users and we installed about ten shops a week, plus training the users. It was the largest retail software rollout in Europe last year and certainly the largest ever in the world optical retail market,” said McCanna.
Ocuco have also diversified into the pharmacy and ophthalmology markets, and their Prometheus software product, which is used in pharmacy practices, enjoys a 10% market share in Ireland. A current priority is securing a deal with a large UK pharmacy chain.
“We have pharmacy sales of about €500,000 a year in Ireland. Over the next two years we plan to invest in localising Prometheus for the UK market and other markets abroad,” said McCanna.
McCanna maintains that Ocuco are operating in very competitive markets.
“There are about 15 suppliers of software to opticians in the UK and Ireland. It is very difficult to achieve a sustainable position in the market. It takes about ten years to get your product sufficiently developed so it is commercially suitable for a large range of practices,” he said.
To achieve this success requires a strong focus on research and development.
“We spent €500,000 to €1m a year on software development, even through the bad times, and our R & D budget going forward is about €2m a year,” said McCanna.
The Relcon deal is part of an aggressive business development strategy on the part of Ocuco.
“More acquisitions are planned, including a company in the US right now, and we will be looking to acquire into the pharmacy and ophthalmology sectors in Ireland, the UK and Europe, while a Japanese presence should be set up before the end of 2006,” said McCanna.
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